Presidential ad havoc

FACTS: Respondents Mohammad Ali Dimaporo, Abdullah Dimaporo, and Amer Dianalan, were stockholders and officers of the Mindanao Coconut Oil Mills (MINCOCO), a domestic corporation established in 1974,[2] while respondents Panfilo O. Domingo, Conrado S. Reyes, Enrique M. Herboza, and Ricardo Sunga, were then officers of the National Investment and Development Corporation (NIDC). On 10 May 1976, MINCOCO applied for a Guarantee Loan Accommodation with the NIDC for the amount of approximatelyP30, 400,000.00, which the NIDCs Board of Directors approved on 23 June 1976. The guarantee loan was, however, both undercapitalized and under-collateralized because MINCOCOs paid capital then was only P7,000,000.00 and its assets worth is P7,000,000.00. This notwithstanding, MINCOCO further obtained additional Guarantee Loan Accommodations from NIDC in the amount ofP13,647,600.00 and P7,000,000.00, respectively. When MINCOCOs mortgage liens were about to be foreclosed by the government banks due its outstanding obligations, Eduardo Cojuangco issued a memorandum dated 18 July 1983, bearing the late President Ferdinand E. Marcos (President Marcos) marginal note, disallowing the foreclosure of MINCOCOs properties. The government banks were not able to recover any amount from MINCOCO and President Marcos marginal note was construed by the NIDC to have effectively released MINCOCO, including its owners, from all of its financial liabilities. The above mentioned transactions, were, however, discovered only in 1992 after then President Fidel V. Ramos (President Ramos), in an effort to recover the ill-gotten wealth of the late President Marcos, his family, and cronies, issued Administrative Order No. 13 creating the Presidential Ad Hoc Fact-Finding Committee on Behest Loans (the Committee), with the Chairman of the Philippine Commission on Good Government (PCGG) as the Committees head. The Committee was directed, inter alia, to inventory all behest loans, and identify the lenders and borrowers, including the principal officers and stockholders of the borrowing firms, as well as the persons responsible for the granting of loans or who influenced the grant thereof. Subsequently, then President Ramos issued Memorandum Order No. 61 outlining the criteria which may be utilized as a frame of reference in determining a behest loan, viz: a. It is under-collateralized; b. The borrower corporation is undercapitalized; c. Direct or indirect endorsement by high government officials like presence of marginal note; d. Stockholders, officers or agents of the borrower corporation are identified as cronies; e. Deviation of use of loan proceeds from the purpose intended; f. Use of corporate layering; g. Non-feasibility of the project for which financing is being sought; h.Extraordinary speed in which the loan release was made. The Committee found that twenty-one (21) corporations, including MINCOCO, obtained behest loans. It claimed that the fact that MINCOCO was under-collateralized and undercapitalized; that its officers were identified as cronies; that the late President Marcos had marginal note, effectively waiving the governments right to foreclose MINCOCOs mortgage liens; and, that the Guarantee Loan Accommodation were approved in an extraordinary speed of one month, bore badges of behest loans.

Subsequently, the Committee filed with the Ombudsman a sworn complaint against MINCOCOs Officers and NIDCs Board of Directors for violation of Section 3(e) and (g) of Republic Act No. 3019, as amended. By Resolution dated 9 July 1998, the Ombudsman motu prorio dismissed the complaint on the grounds that, first, there was insufficient evidence to warrant the indictment of the persons charged; and, second, the alleged offenses had prescribed.The Ombudsman explained: Being undercapitalized, standing alone is meaningless. The approval of the loans/guarantees was still based on sound lending practice, otherwise, MINCOCO would have been disqualified from obtaining the same. If MINCOCOs equity was more than the amount of the loans, there was no need for it to obtain the latter. Anent the claim that Mohammad Ali Dimaporo was a crony of the late President Marcos, no evidence was adduced to prove the same, hence, remains a bare allegation. On the issue that the notation by President Marcos in the Memorandum of July 18, 1983 is a behest order, suffice it to state that these marginal notes, if they meant endorsement as defined under Memorandum Order No. 61, endorsed the recommendation regarding the mortgage liens of the government banks of the Mothballed Coconut Oil Mills and not the approval/grant of the loans/guarantees in 1976. It is in effect approved the release of the liabilities of the former owners of coconut oil mills, one of which was MINCOCO, but not the acquisition of the said loans/guarantees. For the perpetration of the acts being complained of, the respondents are charged of violations of Sections 3(e) and (g) of Republic Act No. 3019. The instant case however, according to the Ambudsman, will no longer prosper for the offenses have already prescribed.

ISSUE: Whether or not the criminal aspect of the case has already prescribed.

Held: In resolving the issue of prescription, the following shall be considered: (1) the period of prescription for the offense charged; (2) the time the period of prescription started to run; and (3) the time the prescriptive period was interrupted. While we sustain the Ombudsmans contention that the prescriptive period for the crime charged herein is 10 years and not 15 years, we are not persuaded that in this specific case, the prescriptive period began to run in 1976, when the loans were transacted.

The time as to when the prescriptive period starts to run for crimes committed under Republic Act No. 3019, a special law, is covered by Act No. 3326,[28] Section 2 of which provides that: Section 2. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment.

The prescription shall be interrupted when proceedings are instituted against the guilty person, and shall begin to run again if the proceedings are dismissed for reasons not constituting double jeopardy. Generally, the prescriptive period shall commence to run on the day the crime is committed. That an aggrieved person entitled to an action has no knowledge of his right to sue or of the facts out of which his right arises, does not prevent the running of the prescriptive period. An exception to this rule is the blameless ignorance doctrine, incorporated in Section 2 of Act No. 3326. Under this doctrine, the statute of limitations runs only upon discovery of the fact of the invasion of a right which will support a cause of action. In other words, the courts would decline to apply the statute of limitations where the plaintiff does not know or has no reasonable means of knowing the existence of a cause of action. It was in this accord that the Court confronted the question on the running of the prescriptive period in People v. Duque which became the cornerstone of our 1999 Decision in Presidential Ad Hoc FactFinding Committee on Behest Loans v. Desierto (G.R. No. 130149), and the subsequent cases which Ombudsman Desierto dismissed, emphatically, on the ground of prescription too. Thus, we held in a catena of cases, that if the violation of the special law was not known at the time of its commission, the prescription begins to run only from the discovery thereof, i.e., discovery of the unlawful nature of the constitutive act or acts.

WHEREFORE, the petition is GRANTED. The Ombudsman is hereby ORDERED to: 1. DISMISS the complaint against deceased respondent Conrado S. Reyes; 2. REQUIRE the counsels of respondents Panfilo O. Domingo and Mohammad Ali Dimaporo to submit proof of their deaths; and 3. FILE with the Sandiganbayan the necessary Information against respondents Abdullah Dimaporo, Amer Dianalan, Enrique M. Herboza, and Ricardo Sunga. SO ORDERED.

Digested by: Jaime A. Lao, Jr.